An overview of Afghan banking system

LAHORE: Contrary to certain perceptions, there are over a dozen banks operating on the Afghan soil under the supervision of country's central bank.

Research shows that “Da Afghanistan Bank,” or DAB, plays the role of a Central Bank, and will now be headed by the Taliban-appointed Mullah Abdulqahar, also known as Haji Muhammad Edris. Since 2003, when the now 82-year-old Afghan Central Bank had started licensing, a good number of banks have opened offices in Afghanistan.

The Afghanistan Central Bank had held $9.4 billion in reserve assets as of April 2021, according to the International Monetary Fund (IMF). In April, the value of its assets was roughly one-third of the country’s annual economic output.

On August 18 this year, eminent British news agency had revealed: “The Taliban took over Afghanistan with astonishing speed, but it appears unlikely that the Taliban will get quick access to most of the Afghan central bank’s roughly $10 billion in assets. The country's central bank, Da Afghanistan Bank, is thought to hold foreign currency, gold and other treasures in its vaults, according to an Afghan official. The most recent financial statement posted online shows that DAB holds total assets of about $10 billion, including $1.3 billion-worth of gold reserves and $362 million in foreign currency cash reserves, based on currency conversion rates on June 21, the date of the report. Ahmady estimated total reserves stood at $9 billion last week.”

According to the London-based “Global Banking and Finance Review,” a leading Online and Print Magazine that attracted 3.36 million visitors to its website in December 2018, major banks in Afghanistan include a branch of Habib Bank Pakistan, Azizi Bank (this second largest banking group in Afghanistan has presence across 31 provinces), Bakhtar Bank (the third largest bank in terms of assets. It is a wholly-owned subsidiary of Azizi Bank), the New Kabul Bank (It is one of the largest commercial banks having 110 branches), Ghazanfar Bank, the Afghan United Bank, Alfalah Bank, First Micro-Finance Bank, Bank-e-Millie (a state-owned bank established in 1933.

Currently it has 15 city branches in Kabul and 21 branches in other provinces of Afghanistan), the Aryan Bank, the Standard Chartered Bank, Brak Afghanistan Bank, Pashtany Bank, Miawand Bank (It is one of the strongest commercial banks in Afghanistan. The bank operates as an international commercial banking institution and acts as a strong catalyst for economic growth and business prosperity), the Afghanistan International Bank (Afghanistan’s largest bank having 37 branches in US cities. Approximately 20 per cent of Afghanistan’s deposit base is held by Afghanistan International Bank), and the National Bank of Afghanistan.

A couple of days ago, the “Wall Street Journal,” newspaper had reported: “Two major US money-transfer services have suspended payments into Afghanistan, and American banks are more closely scrutinizing transactions with Afghan counterparts.”